The Senate Intelligence Committee, for the moment at least, reports that "no basis has been found for concluding [William] Casey is unfit to serve" as director of central intelligence. Why all the fuss, then? Why did Sens. Barry Goldwate, William V. Roth and Ted Stevens call for his resignation? What does all this mean for the U.S. intelligence community and for the American people?

The answers to these questions lie in the unique relationship that exist between the intelligence agencies, Congress and the people. Intelligence is, of necessity, often risky. It can depend upon exotic technologies and upon individuals willing to risk their lives. Its methods are usable to achieve both the highest and the lowest ends. Good intelligence can save the country; poor or misused intelligence can threaten it. And intelligence must remain largely secret, if it is to work at all.

This combination of sensitivity and secrecy has led to a unique system of oversight. The Senate and House have established intelligence committees. Congress also passed a law requiring the director of central intelligence to keep those committees "fully and currently informed of all intelligence activities." The intelligence committees pass on the intelligence budget, get prior notice of covert action programs and other sensitive projects, and watch intelligence practices to ensure that the rights of Americans are not being violated.

The ultimate result of this oversight system is that the intelligence committees, on behalf of Congress as a whole, can assure the American people that the intelligence community is both efficient and honorable. Such reassurance is essential if the intelligence agencies are to keep the people's trust. And that public trust is what enables the intelligence agencies to go confidently and secretly about their business.

This oversight system, so vital to the legitimacy upon which our intelligence agencies depend, is itself a fragile thing. The intelligence committees lack the time or resources to track down every single activity of the intelligence agencies to keep the committees truly "fully and currently informed."

The character of the director of central intelligence thus becomes a central concern of the intelligence committees. If he is prone to bad judgment, the committees know that they will not learn ab out some mistakes until too late. If he is insensitive to the rights of Americans, the congressional committees will have to increase their vigilance and determination to maintain the balance between "reasons of state" and the rights of the people. If he is secretive or overly distrustful of Congress, then oversight itself is threatened.

All three of these concerns have played a part in the Casey affair. His appointment of a campaign aide to be chief of CIA's clandestine operations frankly shocked the intelligence committees. Casey has accepted responsibility for the bad judgement and has assured the Senate Intelligence Committee that his reasons for making the appointment were legitimate, although mistaken.

The Senate committee's inquiry into allegations regarding Casey's past business practices also relates to the matter of judgment. In the Multiponics case, a court found questionable judgment by a board of directors on which Casey served, as well as a tendency not to deal at arm's length with the interests of individual directors. In some of these matters, however, Casey warned the board against unwise actions.

The concern that Casey would be insensitive to the rights of Americans stems largely from his handling of a new executive order on intelligence activities. In March, Casey sent a draft of the provisions affecting the rights of Americans to other agencies for comment. This draft provoked a storm of criticism. It led President Reagan's counselor Ed Meese to make a public disavowal of the proposal: "The White House is absolutely opposed to the CIA getting into domestic spying."

In the wake of that fiasco, there were promises to consult with the Senate Intelligence Committee on future drafts of a new order. This was done, in April, with the next draft that the CIA prepared. Still another draft has now been sent to executive agencies for comment. So far, the Senate committee has not been consulted. Initial reports are that this draft eliminated crucial executive order protections of innocent. Americans, both at home and abroad, and gives the CIA new authority for domestic spying.

So, while the Max Hugel appointment was clearly "bad judgment," Casey's status is an ambiguous "no basis . . . for concluding he is unfit to serve." That is not yet an unqualified fitness report. Only time and Case himself can prove that forthcoming leadership and congressional oversight will maintain public trust in our intelligence activities.

Over two months ago, I wrote Casey warning against substantial executive order changes that would raise the specter of the CIA's pursuing innocent Americans. I have yet to hear his commitment to what must be the shared goals of assuring the national security and reassuring the American people that this will not be at the expense of their liberty and privacy. A good start could be made if Casey would consult with the intelligence committees, after the August recess, before the National Security Council and the president reach any firm decision on an executive order. America could afford the loss of Multiponics, but we cannot afford a new loss of confidence in our intelligence community.